Track the companies that matter to you. It's FREE! Click one of these fan favorites to get started: Apple; Google; Ford.



Stay Off This Metal Rollercoaster

Watch stocks you care about

The single, easiest way to keep track of all the stocks that matter...

Your own personalized stock watchlist!

It's a 100% FREE Motley Fool service...

Click Here Now

Clearly 2008 has been a humdinger of a year for virtually all market sectors. But you'd be hard-pressed to find a group whose fortunes have risen and fallen as dramatically as the mining and metals companies.

From giant steelmaker ArcelorMittal (NYSE: MT  ) to Brazil's big mining company Vale (NYSE: RIO  ) and on to aluminum's Freeport-McMoRan (NYSE: FCX  ) , it's nigh impossible to find a name in the group that's maintained any sort of share or product price consistency throughout the year. However, no member of the group has had a more extreme ride than London-based mining giant Rio Tinto (NYSE: RTP  ) .

Last year the company outbid aluminum producer Alcoa (NYSE: AA  ) to acquire Canadian rival Alcan. And for about 18 months it steadfastly evaded its own purchase by Australia's minerals behemoth BHP Billiton (NYSE: BHP  ) , fending off what could have been the mother of all mining mergers.

But this year has seen its minerals prices -- including those for iron ore -- shoot up like so many bottle rockets, only to tumble to earth just as suddenly. The amazing slide caused BHP late last month to retract its offer of 3.4 of its shares for each Rio Tinto share. It's now clear that Rio Tinto's lengthy and determined stiff-arming of BHP cost it and its shareholders a pretty penny -- or shilling: Late last week its shares -- which have fallen nearly 60% on the domestic markets since BHP pulled its offer -- briefly traded below BHP's on the London Stock Exchange.

Why has the company plunged so far and so fast? The response to that logical query is that, at the time it acquired Alcan, Rio Tinto borrowed $40 billion from 27 banks, an easy and painless accomplishment in that pre-credit crunch time. But now, as you know, things have changed, and there's growing concern about the company's ability to repay the $8.9 billion that'll come due next October and the $10 billion repayment scheduled for the following year.

Rio Tinto apparently is in talks with its banks about refinancing its debt and appears to be rethinking a host of capital projects. But even if the refinancing doesn't turn out to be a Herculean task, it'll be an expensive one for the company. Nevertheless, I can sense some Fools' wheels turning about salting away a few of Rio Tinto's now dirt-cheap shares.  

Don't! This is a crazy world we currently inhabit, and now isn't the time for you to attempt excessive heavy lifting with your portfolio.

Rio Tinto retains a four-star rating among Motley Fool CAPS players. Would you give the company a thumbs up?  

For related Foolishness:

Fool contributor David Lee Smith doesn't own shares in any of the companies mentioned. He does, however, welcome your comments or questions. The Fool has an ironclad disclosure policy.

Read/Post Comments (0) | Recommend This Article (4)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

Compare Brokers

Fool Disclosure

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 790007, ~/Articles/ArticleHandler.aspx, 10/22/2016 1:47:37 AM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...

Today's Market

updated 4 hours ago Sponsored by:
DOW 18,145.71 -16.64 -0.09%
S&P 500 2,141.16 -0.18 -0.01%
NASD 5,257.40 15.57 0.30%

Create My Watchlist

Go to My Watchlist

You don't seem to be following any stocks yet!

Better investing starts with a watchlist. Now you can create a personalized watchlist and get immediate access to the personalized information you need to make successful investing decisions.

Data delayed up to 5 minutes

Related Tickers

12/31/1969 7:00 PM
RTP.DL $0.00 Down +0.00 +0.00%
Rio Tinto plc (ADR… CAPS Rating: ****
AA $26.88 Up +0.19 +0.71%
Alcoa CAPS Rating: ***
BHP $34.96 Down -0.06 -0.17%
BHP Billiton CAPS Rating: ***
FCX $10.04 Down -0.17 -1.67%
Freeport-McMoRan C… CAPS Rating: ****
MT $6.68 Up +0.15 +2.30%
ArcelorMittal CAPS Rating: ***
RIO $32.87 Up +0.45 +1.39%
Rio Tinto CAPS Rating: ***